[Related: Dualization]

Bret Devereaux writes here about the oddities of the academic job market.

His piece is comprehensive, and you should read it, but short version: professors are split into tenure-track (30%, good pay and benefits) and adjunct (50%, bad pay and benefits). Another 20% are “teaching-track”, somewhere in between.

Everyone wants a tenure-track job. But colleges hiring new tenure-track faculty prefer newly-minted PhDs to even veteran teaching-trackers or adjuncts. And even if they do hire a veteran teaching-tracker or adjunct, it’s practically never one of their own. If a teaching-tracker or adjunct makes a breakthrough, they apply for a tenure-track job somewhere else. Devereaux describes this as “a hiring system where experience manifestly hurts applicants” and displays this graph:

He focuses on the moral question: is this good (no), and how can it be stopped (activism). I appreciate his commentary but I found myself wondering about the economic question: why did the system end up like this?

Remember, “greed” isn’t an answer. Greed can explain why management pays some people low salaries, but not why it pays other people high salaries. What process carves off 30% of professors to get good pay and benefits, but passes over the rest? Also, given that some people will get good salaries, why shouldn’t it be the more experienced people?

Maybe this is all so obvious to Devereaux that he didn’t feel it needed explaining, but it’s not obvious to me. And I can’t find any existing discussion, so I’ll make a guess to start the conversation, and people who know more can tell me if I’m wrong.

Colleges want two things from their professors. First, they need them to teach classes. Second, they need them to do good research, raise the college’s reputation, and look prestigious.

Colleges want to pretend to students that the same people are doing both these jobs, because students like the idea of being taught by prestigious thought leaders. But they don’t want to actually have the same people do both jobs, because the most valuable use of prestigious thought leaders’ time is doing research or promoting their ideas. Every hour Einstein spends in the classroom is an hour he’s not spending in the lab making discoveries that will rain down honors upon himself and his institution. And there’s no guarantee Einstein is even a good teacher.

Solution: hire for two different positions, but give them the same job title to make things maximally confusing for students. Have them occasionally do each others’ jobs, so students get even more confused. You very conspicuously hire Einstein, and hold out the carrot of being taught by Einstein. But Einstein actually only teaches one 400-level seminar a year, and every other class is taught by the cheapest person able to teach at all.

The cheapest person able to teach at all is very cheap. The status draw of academia ensures qualified people will keep barrelling into it even if the expected pay and conditions are poor. So there will be a glut of qualified instructors, and colleges can hire them for peanuts.

But Einstein is expensive. In teaching, colleges just want to meet a bar of “able to do this at all”. But in research, colleges want to beat other colleges to hire the most prestigious people. That means if you’re the top PhD in your field, colleges will enter a bidding war to get you. And once someone has you, so on to the second-best PhD, etc. So here demand exceeds supply, and salaries stay high.

This could explain the tenure/adjunct distinction. Adjuncts are selling their ability to teach, tenured professors are selling their prestige, and colleges have decided they only need a certain amount of prestige before they stop caring and fill the other teaching positions with warm bodies. But they obscure all of this with similar job titles to trick students into thinking they’ll get taught by prestigious people.

But then why do they only hire inexperienced people? Why only people from outside their own institution? Here I’m even more confused, but a few guesses:

Maybe colleges really do want “superstars”, not just moderately good researchers. The value of the #1 brightest new PhD is that she has a 5% chance of becoming a future superstar; the value of the #100 brightest new PhD is that she has a 1% chance of becoming a future superstar. Once you’ve been around for five years, colleges can see your track record, satisfy themselves you’re not the next Einstein, and lose interest.

Maybe colleges are very good at predicting who will become prestigious in the future, and it’s rare for a dark horse to rise through the ranks. Maybe if some adjunct professor did become prestigious later on, they would hire them to tenure track, but in fact this never happens. This could be because hiring committees are always right and never miss a potential future star. Or it could be a vicious cycle - if hiring committees dismiss you, then grantmakers and journal editors will also dismiss you, and you won’t have the resources you need to do great work.

In terms of outside their own institution, I wonder if it’s something like this: suppose you’re an adjunct hired for a six month term. You go to the college. You make friends with the department. You invite them to your house for dinner. Your kids get to know their kids. Then a tenure-track opening comes up and you apply. Seems like it would be an emotionally fraught situation for the department to turn you down. Maybe, in order to avoid these kinds of situations, they develop a reputation for always turning down the adjuncts, so that the question never even comes up and you don’t feel aggrieved at them in particular.

Here’s another question that confuses me even more: Why don’t colleges hire everyone in some low-commitment capacity, maybe as adjuncts, wait to see who becomes superstars, then poach them?

From a college’s point of view, the downside to this strategy is that some other college can hire a promising new PhD for more money, then try to keep them out of loyalty and inertia after they reach superstardom. But are superstars really that loyal and inert? Why?

My brother was a professor on the tenure track. When he wanted to move, his new college offered to start him on the same part of the tenure track as his last institution. Seems like a good start. But why aren’t colleges more like un-salary-capped sports teams, trying to outbid one another for their rivals’ superstars?

While waiting for his flight at Prague Airport in the Czech Republic, piano player and musician Maan Hamadeh sat down at a public piano and played Beethoven’s famous Für Elise for an unsuspecting crowd in various styles and renditions.

The unexpected performance was a treat for other passengers, I can’t think of a better way to wait for a flight!

Sometimes you just have to sit back, look at some charts, and say WTF...

Carry Trade
1. SPX vs USDJPY

2. SPX vs US Treasuries

3. SPX vs US Term Structure

Fun-durr-mentals
4. SPX vs Fwd EBITDA Expectations (bottom-up)

5. SPX vs US Macro (top-down)

6. SPX vs Jobless Claims (so long held as supportive of the recovery)

7. SPX vs Lumber (the housing pillar is cracking)

Risk Assets
8. SPX vs High Yield Credit

9. SPX vs China's Shanghai Composite Equity Index

10. SPX vs Japan's Nikkei 225 Equity Index

11. SPX vs Emerging Market Bonds

12. SPX vs Emerging Market FX

Of course, there are those who see these charts and through no self-referential cognitive-dissonance of their own (well in fact entirely for that status quo engendering reason) will proclaim... that proves it - US is cleanest dirty shirt and money is flooding back to 'safety' - however - that is entirely disingenuous...

The ironists among market punters will even attempt to construe all this as a reason to buy more developed world stocks on the premise that the money flooding out of such places as Thailand, the Ukraine, Turkey, and Argentina will be parked in the S&P and the DAX (perhaps overlooking the fact that the purchase price of these now-unwanted positions was most likely borrowed, meaning that their liquidation will also extinguish the associated credit, not re-allocate it).

 

The Goldilocks lovers will also tend to assume that any such disruption will serve to delay the onset of genuine tightening and may even induce further ill-advised stimulus measures on the part of the major central banks. Certainly Madame Christine Defarge – that tax-sheltered tricoteuse who knits beside the guillotine set up for the hated bourgeoisie – has already begun to militate for such a response.

 

For their part, the biddable are already trying to drown out the noise of the Cacerolazo by making the fatuous argument that the EMs account for such a piffling portion of world GDP that their fate should be a matter of complete indifference to the rest of us. Needless to say this is a touch disingenuous at best. Their share of end consumption-biased GDP may be lower, but they account for an equivalent fraction, if not a small majority, of global industrial production – and they have been responsible for an even bigger proportion of its growth this past decade. Ditto for trade and ditto for resource use.

Bonus
13. SPX vs The Federal Reserve Balance Sheet - The Truth

From the "Mathbabe":

Not every person gets trained in being wrong and admitting it. I’d wager that most people in the world, for most of their professional lives, are trained to do the opposite in the face of being wrong: namely, to wriggle out of it or deflect criticism. Most disciplines spend more time arguing they’re right, or at least not as wrong, or at least they have different mistakes, than other related fields.